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CA Considers Taxing Solar Power Generation

California is considering a proposal by the state Public Utilities Commission to charge an 'exit tax,' proportional to the amount of power you generate, on electricity generated by means such as solar panels for your own use. I would expect a state like California to try and encourage the adoption of alternative power sources, but this seems a really odd way of doing it. Two groups have started lobbying against this tax. If passed, it sets a precedent that many fear will lead to similar taxes outside CA.

33 of 107 comments (clear)

  1. This is ridiculous by fobside · · Score: 5, Insightful

    Since when does any government have the right to place taxes on unrefined, natural resources like the sun? Pretty soon, they'll be trying to charge for the spinning of a pinwheel or the clanging of wind chimes in a front lawn. If an individual were to sell unused power to other people, I could see how a tax might be warranted.

    1. Re:This is ridiculous by thinmac · · Score: 3, Insightful

      It's not a totally new idea. I remember being told in Israel that they taxed water as a state resource because it was in such short supply. Even nomadic folks living out in the desert had to carry little water meters, and pour all the water they use through it. That's a little different, though, since they're using a whole lot larger percentage of the water in the country than California is the sunlight that falls in the whole state.

      Actually, if you think about it, taxing real estate is sort of like taxing an 'unrefined, natural resource', and people have done that for a whole lot longer than they've taxed almost anything else.

      Not that I think this new tax is a good idea, just that I don't think it's completely out of left field.

    2. Re:This is ridiculous by anubi · · Score: 4, Funny
      Even nomadic folks living out in the desert had to carry little water meters, and pour all the water they use through it.

      If they pee, do they get credit?

      --
      "Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]

    3. Re:This is ridiculous by Anonymous Coward · · Score: 4, Interesting

      Taxing water and land are different in that they are *limited*. My owning land precludes anyone else from owning that land, but my using sunlight doesn't take away from anyone else potential use. The sunlight was falling on my property so no one else could even get a chance to use it without my permission, and unlike water the sunlight can't "flow" onto someone else's land for their use.

      Air, for all purposes currently, is effectively unlimited. Would we even consider the idea of taxing breathing?

    4. Re:This is ridiculous by exp(pi*sqrt(163)) · · Score: 2, Insightful

      They get the right from the same place as they get any other right to charge tax. What's different about this?

      --
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    5. Re:This is ridiculous by fish+waffle · · Score: 2, Interesting

      Rest assured i think it's as ridiculous as do you. But not because of any reasoning that taxation has or ever will consistently follow a logical principle. Governments have never had a problem taxing relatively arbitrary practices; there's perhaps a bias towards taxing wealth (at least in name) and transactive behaviour, but counter-examples certainly exist to fungibility as any guiding principle (eg television receiver taxes in parts of europe).

      Casting shadows over other people's land does raise some legal problems, but these people aren't building giant towers on their property lines in order to "steal" the light from neighbors. They have solar collectors on their roofs and gather light that wasn't going, nor could potentially go, anywhere else.

      Well, no. But just because it's not being fully exploited doesn't mean its a permanently unconstrained resource. Even going with the theory that no one but you can use it (ie ignoring consideration of shadows, which makes for a very big caveat) it doesn't seem to me that this sort of taxation is in contradiction to past or present practices. The differences you're emphasizing just do not seem like a valid basis for evaluating a potential tax source.

  2. not to complain but by hswerdfe · · Score: 5, Funny

    CA = Canada

    its our top level domain. damit

    I don't care if California has a bigger economy or not.

    we are not giving it up

    --
    --meh--
  3. The Sunshine State! by dnahelix · · Score: 4, Funny

    I guess that slogan actually means that California owns the fawking SUN!!!!

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    1. Re:The Sunshine State! by NewWazoo · · Score: 3, Informative


      Uh, that'd be Florida, Bob.

      Brandon

  4. Exit Tax vs Incentives? by jsimon12 · · Score: 3, Insightful

    "increase the cost of using solar energy in California....by up to 40 percent..."

    This makes no sense? Why offer incentives if they are going to turn around and tax? California offers something on the order of a 50% rebate+tax credit on solar, why turn around and tax the system? If they are really having problems just lower the incentive to 10% rather then give the person 50% then take back 40%? What are they trying Enron accounting here?

  5. just when you think the bar is highest... by chriso11 · · Score: 5, Insightful

    Amazing! Just when you think the most ludicrious proposal comes along, they top it with ease...

    While they're at it, they should count the number of compact florescents I installed and tax me on the amount of electricity I'm not using...

    --
    No, I don't trust in god. He'll have to pay up front, like everybody else.
    1. Re:just when you think the bar is highest... by SchnauzerGuy · · Score: 5, Insightful
      That is exactly what they are doing. There is no important difference between
      • Your power load is decreased because you are generating some of your own electricity.
      • Your power load is decreased because you are conserving electricity.
      Either way, you aren't contributing enough to paying off those utility bonds.
  6. Not just solar power... by SchnauzerGuy · · Score: 5, Informative
    This proposed tariff doesn't just apply to solar power, but any kind of "off-grid" power generation:
    "Customer Generation" as used in this order, incorporates the definition in the Joint Parties' Settlement Agreement. It refers to cogeneration, renewable technologies, or any other type of generation that (a) is dedicated wholly or in part to serve a specific customer's load; and (b) relies on non-utility or dedicated utility distribution wires rather than the utility grid
    That means wind power, fuel cells, diesel generators, etc. are also covered. And since the settlement covers anything that reduced the customer's load, presumably even geo-thermal heating/cooling systems would be taxed.
    1. Re:Not just solar power... by slide-rule · · Score: 2, Informative

      Wording in the second paragraph on the second page (i.e., defining "Departing Load" that they're wanting to tax) makes me wonder if there's an [exceedingly] minor hole: the definition says you either stay at the same location or move to somewhere supplied by the utility. (singular sense). Not being a resident, is it possible to move inside CA where you would have to change utilities to one of the other two (of three listed) utility providers? Then, could you use self-generation without impact?

      Relatedly, what if I was to (shudder!) move to CA? I've never been served by the utility(s) before, so there's no "departing load". ?

  7. Wow, can't be by Strange+Ranger · · Score: 2, Insightful

    Might as well have a Composting Tax and Gardening Tax for producing your own fertilizer and food. I bet it's a bluff, a feint. The commission really wants something slightly less atrocious, and after this they'll get it.

    Old trick. Always works too.

    --

    Operator, give me the number for 911!
    1. Re:Wow, can't be by zcat_NZ · · Score: 2, Insightful

      I already suggested that (a garden tool tax) on the RIAA-internet-tax story. This tax is no different to the RIAA's blank media tax or their attempted internet tax.

      The precedent has been set. You missed the chance to stop it back when they started taxing blank casette tapes.

      --
      455fe10422ca29c4933f95052b792ab2
  8. what about power saving ads ? by wotevah · · Score: 2, Interesting

    I don't understand then. If they tax people for not using the electricity from the grid, that must mean there isn't enough demand for what they have (otherwise they would have no basis). How does that work with the "Real Californians don't do their laundry... except after 7" ads ?

  9. Yes, scary, but read the first line. by tunah · · Score: 4, Informative
    California is considering a proposal by the state Public Utilities Commission

    Proposed by the "Utilities": the power people. "Considering" could just mean they are deciding whether to laugh milk or coke out their nose. Then again, it might not...

    --
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    1. Re:Yes, scary, but read the first line. by Anonymous Coward · · Score: 2, Interesting

      You're right; Utilities Commissions worldwide try to chew waay more than they can bite. Normal. My conjecture is that 1) this is only a publicity stunt and will never become law, and 2) it's meant to deflect attention from another issue which is equally or more controversial, but one that the power companies would like to pass through with minimum fuss.

      Of course, I could only be peddling conspiracy theories, but Californians would want to closely read about *everything* they propose.

    2. Re:Yes, scary, but read the first line. by Anonymous Coward · · Score: 2, Insightful
      The tax also isn't what most people seem to think it is. It only took me a few seconds to click though to the right section and get an idea what this is really about.

      The point is to stop a utility company from setting up a gas powered generator next to a factory and avoiding state taxes by not using the electric grid.

      I don't think anyone here even read the law before going on another anti-tax bender.

  10. attention stupid people... by kevin+lyda · · Score: 3, Insightful

    a whole bunch of you idiots are going to blame the government. however, the government is just doing what its constituents want. since most of you are too lazy to vote, never mind really get involved in politics, the real constituents are the ***PRIVATE*** power companies that essentially wrote this proposal.

    just like they wrote the energy privatisation bills in california and tons of other states. so all you moronic, short-sighted, ignorant libertarian "privatisation-at-any-cost!" now have *EXACTLY* what you want.

    congratulations. go team. ra-ra.

    so i really only have one question - why in the hell are you complaining?

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  11. California ruins it for the rest of us. by Fritzed · · Score: 2, Interesting

    Those of us in Washington state already know that California likes to screw up the electrical industry for the rest of us. They already messed it up a few years ago when the government stopped putting any control on their power stations. Now they have to drain a lot of their energy from stations still under government mandate in Washington which makes our rates go up.
    -> Fritz

    --
    Spooooon!!!!!
  12. Re:Desperation move by walt-sjc · · Score: 4, Insightful

    Why wait? Go to a "business friently" state and start your own consulting company.
    I moved to a smaller town where the taxes are low, housing / land is cheap, and work can be had for anyone with a little ambition.

    California has lost it completely. With the scools ranked 49th in the country, taxes approaching the highest, Loopy laws and fruitcake bezerkely behavior all over the place, housing prices among the top in the country, no jobs, environmentalist protecting fucking common garden worms, some of the most corrupt government officials (Davis and crew) on the planet, why the HELL would you stay?

  13. Re:Well solar panels... by Smidge204 · · Score: 4, Insightful

    But the government already collects tax when you purchase the panels. Twice. (One sales tax from you, again as income tax for the company). They also collect tax if you hire a contractor to install them.

    What they're proposing here is basically to put an electric meter on your panels and charge you for the sunlight you collect.

    Sounds to me like the power companies are lobbying this to try and make up for lost revenue, just in case too many people decide solar would be a good investment. (Which is probably would be)

    I didn't see anything about solar thermal heating, though. Hmm...
    =Smidge=

  14. Massachusetts taxes perscription drugs by crow · · Score: 2, Informative

    Speaking of taxes that fly in the face of logic, Massachusetts has instituted a tax on perscriptions. Each perscription costs you an extra $1.30 or so on top of your insurance co-pay.

    They call taxes on things that government wants to discourage (like tobacco and alcohol) sin taxes. I guess that makes these virtue taxes.

  15. Re:attention Sheep by Gigs · · Score: 2, Interesting

    "just like they wrote the energy privatisation bills in california and tons of other states."

    Ah... where did you get that idea??? Liberals wrote the law not the power companies. The supposed deregulation set up a fix rate for the consumer but the distributers still had to pay the whatever the wholesaler wanted. Which is to say that it wasn't deregulated it was infact regulated. As demand rose the wholesalers started to charge more so that they could afford to build new cabling to supple the demand. Only problem was that the distributer was not allowed to raise the rates to cover his increased cost because his fess where, say it with me, REGULATED!

    "so all you moronic, short-sighted, ignorant libertarian "privatisation-at-any-cost!" now have *EXACTLY* what you want."

    If it was truely private the government wouldn't be making all these laws to, say it with me again, REGULATE the market.

    What this is, is an example of QUINN'S FIRST LAW - "Liberalism generates the exact opposite of its stated intent."

  16. Re:attention Sheep by cp99 · · Score: 2, Informative

    This would be the Enron version of events.

    Another version would go like this; because of high electricty prices, California decided to privatise it's power generation system, but thanks to only partial deregulation, and market manipulation it ended up with large increases in the cost of power, and blackouts to go with it.

    --
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  17. Re:attention Sheep by Gigs · · Score: 3, Interesting

    I'm confused on what your point is or if its any different than what I said:

    because of high electricty prices which were caused by an increase in demand.

    California decided to privatise it's power generation system, but thanks to only partial deregulation which was written into the laws by the liberal government that could not let go, because we all need managed, left to our own we would all perish. (that last part was sarcastic!)

    and market manipulation I assume you mean the fact that the wholesalers didn't lower their prices and the distributers had to layoff their workers that maintain their systems.

    it ended up with large increases in the cost of power caused by the fact that the wholesalers still needed to build new infastructure to supply demand. And the distriubuters now had to replace infastructure that had not been maintained due to lack of a paid work force.

    and blackouts to go with it. caused by the fact that the orginal law did nothing to solve the problem of demand outstepping supply. It just swept it under the carpet for a few years. When the lights started to go out it suddenly became a huge issue.

  18. Read the Full Law by Anonymous Coward · · Score: 4, Informative
    Did anyone read this law before posting? The submitted story leaves a lot of important facts out. I only read one seconds (background), but it quickly became clear that this isn't targeted at home solar panels, but things like gas powered generators set up next to factories.

    Every time the word taxes appears in the story, everyone goes crazy flaming the government.

  19. That is not true. by Ashurbanipal · · Score: 4, Insightful

    First of all, whoever told you that "it takes more energy to manufacture one than they ever generate in their useful life" was incorrect.

    Perhaps you should try to figure out if it is because that person needs education, or because (s)he has a vested interest in deceiving you.

    Second, the point of solar panels is not always lifetime efficiency anyway, it is often control of power generation by the person(s) needing the power - intelligent people act to secure the resources they need to survive, and the power grid (in California, at least) is not reliable and cannot be secured by consumers.

    There is a wealth of data available online from the IPP and Sandia that will refute your claim. Or you could directly contact a vendor such as Siemens (German) or AstroPower (Delaware, USA).

    The proposed tax is simply the latest move in the long-running war between the centralised dirty energy producers (championed by GWB and Cheney, among others) and the promoters of distributed clean renewable energy production (a grassroots movement championed principally by the Home Power crew).

    This war is primarily being fought in and around California; mostly because of the high availability of sunshine and engineering talent in that area. The recent fake energy crisis that the Enron crowd purposely created was the most effective offensive in the same war so far.

    Hopefully, the decentralized nature of grassroots opposition will prevent the current administration's attempt to crush distributed renewable energy producers. The "Solar Guerilla" movement was started for just this reason.

  20. Very, very strange, and backwards... by DarkVein · · Score: 3, Interesting
    Most states give tax incentives to alternative energy. Many require power companies to buy back excess power, not charge for it. Some of those will buy back into the red, so the power company has to pay you at the end of the month.

    In fact, since 2000, California has:
    • Started an incentive program that grants a one-time payment of $4.50-$6.50/watt generated by homes or businesses connected ot the LA DWP power grid, starting 2000/9/1 and ending five years later.
    • The State of California provides an income tax deduction of 15% towards the net cost of installed grid-connected solar electric systems. This new tax credit is retroactive to January 2001.


    If you put solar panels on your roof, Fairfax Virginia county will allow you to deduct the value of the panels from the cost of your roof, for tax purposes. HOAs sometimes prevent this when they're obtrusive, but they don't have to be.

    In short, way to backpedal California! I have an idea. Why don't you also give tax breaks for the rich, and support failing business models based on absolute control of copyright? Same mentality involved there, also. Kill your own economy early off for a few extra bucks before your die.
    --

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  21. only taxes if you bank into the grid? by Splork · · Score: 2, Insightful

    Reading through the document it looks like this is designed to only add a tax/surcharge to customers generating their own power that actually feed their excess back into the power grid (known as banking).

    So no, a geo-thermal heating/cooling system or turning off your air conditioner on a hot day could not be taxed.

    This proposal appears to hide behind an attempt to say "running+managing the grid costs money, even power producers should pay if they are hooked up." That is only true to a point. Until a significant number of customers start doing consumer power generation (10%, etc) this makes no sense whatsoever except when you realize that the PUC would rather consumers live in completely cold black boxes that need tons of light and heat with no way to generate their own power and efficiently use it.

    The PUC companies would be better served by scrapping this law and adjusting their variable rate schedule power prices at different times of day to recoup their grid operation and management enrichmet costs from consumer generation.

  22. This tax problem exists with many use taxes. by Above · · Score: 2, Insightful

    With governments losing all sorts of tax revenue due to basic economic factors, they are looking all types of problems. This one is not unusual:

    * Governments tax electricity, if you generate your own or conserve they loose tax money.

    * Governments tax gasoline. If you use fuel cell cars or more energy efficient cars they loose tax money.

    * Governments tax cigarettes. If you smoke less of them they loose tax money.

    Use taxes and sin taxes often seem like a good idea, but the government quickly get used to the income, and when one activity falls out of favor they must hit up some other activity with a new use or sin tax to pay for it.